Q. With reference to the Production Linked Incentive (PLI) scheme, consider the following statements:
1.Under the scheme, the participating company gets guaranteed profits irrespective of performance.
2.The scheme promotes import substitution and self-reliance.
3.The scheme is open to both domestic and foreign companies.
How many of the statements given above are correct?
Explanation –
Statement 1 is incorrect. The PLI scheme doesn’t guarantee profits for participating companies. Instead, it provides financial incentives based on the company’s performance, such as achieving predetermined production and investment targets. The scheme provides incentives to eligible companies based on incremental sales (over base year) of goods manufactured in India and covered under target segments, for a period of five to six years.
Statements 2 and 3 are correct. The PLI scheme aims to encourage local manufacturing and reduce reliance on imports, thus promoting import substitution and self-reliance. The PLI scheme is open to both domestic and foreign companies that meet the eligibility criteria. This is intended to attract foreign investment and expertise to India’s manufacturing sector. It incentivizes both foreign and domestic companies to establish or expand their manufacturing operations in India.
Source: Forum IAS
